SUPPORTLINE by FONG MIN YUAN
AEMULUS Holdings Bhd is mounting a challenge to the resistance at the 50-day simple moving average at 45.5 sen in an attempt to move out of consolidation. The stock broke out of the short-term descending trend line on April 10 when its share price spiked nearly 20% to an intra-day high of 43.5 sen. The counter continued to push higher but found itself losing positive momentum to take on a sideways trading pattern by the end of the previous trading week. Given the sharp gains seen over the week, this could have been a temporary breather before the rally resumed. The share price attempted to push forward on Monday but found itself trapped by the 50-day SMA, which prevented it from moving higher on the price chart. Reflecting the share price movement, the technical indicators were mixed and gravitating lower towards neutral ground, although there remained evidence of positive momentum. This may be a brief halt to the uptrend and investors can adopt a wait-and-see approach to see if there is a pick-up in buying interest. The slow-stochastic momentum index, fell under the overbought line at 77 points and looked to descend further in an attempt neutralise. The 14-day relative strength index, however, dipped into neutral territory but halted its descent and moved in a horizontal direction at 66 points. Meanwhile, the daily moving average convergence/divergence line maintained its push towards the zero line, distancing itself from the trigger line. Given that there are signs of life in the indicators, there is an opportunity for the stock to move past the immediate resistance, which would give the bulls plenty of grazing room before it hits the next resistance at 54 sen, which meets the 100-day SMA. If the stock consolidates further, it will find immediate support at the 42 sen mark although a pullback will bring to a stronger support level in the form of the short-term 14- and 21-day SMAs at the 39 sen mark. The comments above do not represent a recommendation to buy or sell. Note: This article first appeared in StarBiz Premium yesterday.